Per “Hu”: A unifying constant for calculating complex environmental, social, and governance impacts

12 Pages Posted: 1 Dec 2023

See all articles by Nicky Gillibrand

Nicky Gillibrand

affiliation not provided to SSRN

Chris Draper

Ostrom Workshop on Data Managment and Information Governance; Indiana University

Date Written: November 25, 2023

Abstract

Circular economy (CE) and environment, social, and governance (ESG) analyses typically report the effectiveness of environmental protection efforts in terms of greenhouse gas emissions (GHG). Comparing effectiveness using GHG has a few major problems. First, GHG comparisons provide a false sense of objectivity since (i) most GHG estimations depend on models whose underlying data may not be sufficiently detailed for their complexity and (ii) GHG is a symptom that does not directly measure the cause of environmental damage. Second, GHG comparison causes a “carbon tunnel” that prevents focus on meaningful efforts that do not have an easily calculable GHG equivalence. And most importantly, a focus on GHG misdirects CE and ESG efforts towards achieving arbitrary GHG targets and away from continual improvement towards solutions-focused optimizations.This whitepaper hypothesizes that CE and ESG efforts are most fairly evaluated by determining the proportion of the problem being solved. For instance, if a problem is of X size and Option 1 solves 10% of that problem while Option 2 solved 2% of that problem, then Option 1 is 5-times better than Option 2. Making these types of comparisons requires a base unit of comparative measure within which any problem can be normalized as a function of its impact. In seeking a uniform normalization metric, this whitepaper further hypothesizes that the root of modern environmental degradation is human activity. Therefore, the authors propose that negative environmental impacts, solutions, and offsets, should be comparatively measured in terms of human impact units (Hu). Measuring impact and any countermeasures in Hu allows different regenerative actions to be fairly compared relative to the magnitude of the addressed problem’s impact on the population. In this way, Hu is a low-cost weighting system that allows for contributions from organizations where calculating GHG equivalence was economically prohibitive to demonstrate the societal value of their actions.

Keywords: Circular Economy, ESG, GHG, CO2, climate change, environmental impact, Hu

Suggested Citation

Gillibrand, Nicky and Draper, Chris, Per “Hu”: A unifying constant for calculating complex environmental, social, and governance impacts (November 25, 2023). Available at SSRN: https://ssrn.com/abstract=4643983 or http://dx.doi.org/10.2139/ssrn.4643983

Nicky Gillibrand

affiliation not provided to SSRN

Chris Draper (Contact Author)

Ostrom Workshop on Data Managment and Information Governance ( email )

Bloomington Indiana, IN
United States

HOME PAGE: http://https://www.linkedin.com/in/christopherhdraper/

Indiana University ( email )

107 S Indiana Ave
100 South Woodlawn
Bloomington, IN 47405
United States

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